Table of ContentsA partnership will have the following advantagesLess legal responsibilitiesSimplicity and flexibilityUnlimited liabilityInstabilityStatusLiability is limitedLower tax levelsSurvivalAccounting and reportingLegal obligationsThe cost of establishment is highThe choice of business ownership type is a very important aspect of starting a business as it determines various legal and operational issues that affect a business. There are many types of business ownership that can be established when starting a catering business. The most suitable type of ownership for this will be either a partnership or a limited company. Both have their strengths and weaknesses, which I've outlined below. Say no to plagiarism. Get a tailor-made essay on “Why violent video games should not be banned”?Get an original essayA partnership is where the ownership of the business is shared between two or more people.A partnership will have the following strengthsRevenue earned by the company will go directly to the partners. The partners will be able to share all the profits between them since they will not have to pay taxes on behalf of the company. This avoids the problem of double taxation, where a business will be taxed and then the owners will be taxed again on the profits they received. Fewer Legal Liabilities There are not many legal requirements to meet when starting a partnership. It is not even mandatory to have a partnership agreement, although it is preferable to have one. There is no need for a particular governance structure. The partners can decide for themselves how they want to run the business. They can choose a centralized structure or a completely decentralized structure that allows all partners to actively participate in management. Simplicity and flexibility Less expensive to train and requires less formality and paperwork. Business decisions can be made through discussions between the partners themselves. The weaknesses of a partnership can be stated as follows. Unlimited liability Partners are personally liable for commercial debts and liabilities. If the business goes bankrupt, the partners will have to somehow pay off all remaining debts and obligations using their personal assets. Each partner is equally liable for debts incurred by the actions of another partner. Instability There may be instances where a partnership may not be as stable, as a partner's actions themselves may lead to the dissolution of the partnership. The death, bankruptcy or resignation of a partner may result in the unexpected dissolution of the business. When it comes to a limited company, the advantages that can be obtained are as follows. Status The term “limited” gives the company more esteem and makes it appear larger, which will help attract more investors and customers. Additionally, suppliers and other businesses are more willing to deal with a limited company because of its professional image. Liability is limited In a limited company, shareholders cannot be held personally liable for the debts and liabilities of the company. Each shareholder's financial liability for the company's debts is limited to the value of his or her initial investment. Lower Levels of Taxation Limited liability companies are subject to lower levels of personal taxation than those imposed on partnerships. legal entity, it will survive beyond the existence of its initial owner...